We’re ignoring hard lesson of our collapse
Experience and wisdom come at a cost, sometimes a bruising one. Our enthusiastic, lemming-like demands for the restoration of indulgences funded by borrowing that led to the loss of our economic sovereignty less than a decade ago suggests that we might update that shame-on-me nugget: “Fool yourself once foolish you, fool yourself twice tragic you.”
The extract published today from Daniel McConnell and John Lee’s Hell at the Gates is a reminder of how desperate, how isolated, and how close to collapse we were at the lowest point of that calamity. It is also a chastening reminder of how we were so complicit in our own downfall. The extract is far more than a history of desperate times, it is a warning that, by any objective criteria, we seem hellbent on repeating the mistakes that set this Republic back by at least a decade and made us dependent on the questionable and expensive — and likely to get more expensive — kindness of strangers.
Last Tuesday’s budget indulged those lunacies. Characterised by small spending increases and even smaller tax cuts it will not win new friends for Government but it will feed the opportunism so alive on the opposition — and “friendly” opposition — benches. It has been called uncaring and unimaginative despite the Sword of Damocles swinging over us all — this year the State will spend around €500 more for every man, woman and child in the country than it takes in.
It is easy to point the finger at Government for trying to achieve the impossible — satisfying our bewildering, dangerous sense of entitlement while trying to manage the public purse prudently. In one sense the miracle of the loaves and the fishes was child’s play compared to the challenge facing a finance minister in a society that imagines itself far richer than it really is. If the warnings about a slowing economy — not just ours — come to pass that challenge will be even greater next year. Especially as sterling is in freefall and the real consequences of Brexit will be all the more apparent.
Any discussion about public finances cannot avoid reference to the public sector pay bill. That bill will rise by €850m next year and this increase represents 42% of the total extra spending outlined last Tuesday. It will push the total pay bill to over €20.5bn, just €700m below the 2008 peak. When these figures are framed by the fact that there are around 30,000 fewer public employees compared with 2008, average gross pay this year has already passed the Celtic tiger peak of 2008. The €850m increase equates to €2,500 per public servant. These figures suggest that pay restoration to pre-crash levels has arrived through the Lansdowne Road agreement, paradoxically, a structure designed to contain pay growth. This seems an inconvenient truth at the very moment when so many public sector unions are threatening dire consequences if pay demands are not met. Public sector pay is just one factor in our charge to return to the bad habits that all but ruined us. Tragically, it seems that we are determined to ignore the hellish lessons of our last, avoidable collapse.
